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US-China trade war offers chances to Malaysian exporters

As the US is imposing new tariffs on US$200 billion worth of Chinese goods, local exporters are expected to see some increase in orders from the affected players in the two big economies over the next few months.

It is understood that the US tariffs will take effect on almost 6,000 goods from Sept 24, starting at 10% and increasing to 25% from the start of 2019.

Economics Professor Dr Yeah Kim Leng believes the affected firms in both respected countries will be looking at sourcing for other countries and relocate part of their production plants to other countries, including Malaysia.

“Now that the lists of goods are much wider, they [local firms] are likely to see greater inquiries and look into securing some of the production contracts,” Yeah said, as affected companies are looking to reduce their costs due to the additional tariffs.

“The US dollar has once again strengthened on increased trade tensions, while a wide basket of different emerging market currencies is once again on the back foot due to a lack of risk appetite for emerging market assets. This probably means another blow for the likes of the Indian rupee, Indonesian rupiahs and South African rands.”

“The outcome is negative for the Chinese yuan, however it has been priced in throughout recent weeks and the reaction in the yuan has not been as negative as would have been first feared.”